Citing Northeast market need and perhaps ignoring the track record of other recent projects in the area, TransCanada Corp. and Shell US Gas & Power LLC announced plans for a deepwater liquefied natural gas (LNG) import terminal about 11 miles off the coast of Connecticut and nine miles offshore Long Island in Long Island Sound.
The proposed Broadwater Energy offshore LNG terminal would include a floating storage and regasification unit (FSRU) with an average send-out capacity of 1 Bcf/d. Broadwater Energy LLC would operate the facility, while Shell would own the capacity and supply the LNG. The estimated cost of construction is $700 million.
“New York and Connecticut are regions specifically identified as needing additional energy supplies,” says TransCanada CEO Hal Kvisle. “TransCanada is in the business of connecting gas supply to markets, and the Broadwater Energy proposal is a demonstration of this commitment to delivering this safe, clean, reliable energy source for the future.”
Catherine Tanna, Shell Gas & Power’s director for the Americas and Africa, said the project is a “positive opportunity for the New York and Connecticut markets.”
In December, the staff of the Federal Energy Regulatory Commission concluded in a report that construction of additional gas pipeline and LNG import capacity is necessary for New England to meet its growing gas supply needs through 2010. The report noted that rising regional gas demand is expected to push pipelines to load factors well in excess of 90% of capacity during periods of peak demand. Meanwhile, gas use in New England continues to grow. All new power generation added to the region over the last four years has been natural gas-fired.
Several other projects currently are in the works in New England, New York and New Jersey, including an expansion of Tractebel’s existing LNG terminal in Everett, MA, KeySpan’s plan to convert its LNG storage facility in Providence, RI, into an import terminal by 2005, the Weaver’s Cove LNG project in Fall River, MA; and BP’s Crown Landing project in Logan Township, NJ.
FERC staff believes that at least three LNG projects probably will be needed to meet demand growth. Additional pipeline capacity also eventually will be needed to serve New York City and the region, staff said.
However, all of the proposed projects have encountered stiff environmental, landowner and sometimes regulatory opposition. Two pipeline projects in New York and Connecticut, the Millennium Pipeline and the Islander East project, have basically been stalled since the late 1990s. Islander East would cross Long Island Sound, and Connecticut has objected to its impact on its coastline.
A Long Island Sound power cable project also was blocked last year but ended up being forced into service by the Department of Energy through an emergency order after the August 2003 blackout. Surrounded by the eastern megapolis, Long Island Sound often is filled with pleasure boats and fisherman in the summer.
Market need clearly has not determined the fate of many other energy projects in this region. TransCanada and Shell face a challenging uphill battle. But a Shell spokesman noted that there are no other LNG projects proposed specifically for this New York-Connecticut market. “And secondly [this project is being proposed] with full recognition of the permitting and public issues,” he said. “That’s why the project has been designed and structured in a way that is most consistent with the interests of the region, and that means the offshore location and a site that is the most remote in the Sound in terms of marine traffic. The facility is barely visible from shore on even the clearest days.”
He also said the project includes a variety of other measures to decrease its environmental impact. It will be a floating port facility so the only footprint on the sea floor itself will be the mooring structure, which is about the size of a basketball court. It also will use a closed system for the vaporizers that will not include the use of seawater from the Sound. And it will include a subsea pipeline connection to the Iroquois Gas Transmission system via a 25 mile pipeline extension. He said the most sensitive areas in the Sound are near the shoreline and the Broadwater facilities will avoid the coastal environment.
“The ultimate value in this area from an environmental standpoint is in bringing in this much gas to enable some of the power generation in the area to burn more gas and create less pollution.”
Before construction can begin, the proposed Broadwater Energy LNG facility must receive numerous state and federal regulatory approvals to proceed. The approval process is expected to take up to three years. The companies already have filed a request with FERC to initiate a six-to-nine month public review of the Broadwater proposal. Provided the necessary approvals are received, it is expected the facility will be in service in late 2010.
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